Nostra Terra (AIM: NTOG), the oil & gas exploration and production company with a portfolio of development and production assets in Texas, USA, is pleased to provide its growth plans for 2022, continuing the positive Company developments in 2021.
· Grow cashflow
· Drill 3-4 new wells – to be funded from existing cash resources, facilities and cashflow
o 1 new development well in Pine Mills
o 2-3 new wells in the Permian Basin
· Further progress opportunity in Tunisia
Nostra Terra has a portfolio of producing assets in the USA, where the Company is net cash generative to the corporate level. As a result of increasing production, strengthening oil prices, and prudent management, the Company is now self-funding. Nostra Terra is pleased to share its growth plans for 2022, which will commence with immediate effect and which are planned to maintain a fast pace throughout the year.
The Company is planning the drilling of 3 to 4 new wells in Texas. The necessary capital expenditure will be funded from existing cash resources, facilities and cash generated from Nostra Terra’s oil producing portfolio and it is expected that production from these additional wells will grow free cashflow significantly. The wells are within the Company’s existing areas of operation, thus minimising drilling risk and utilising synergies which will enable lower operating costs post-drilling and completion.
The first well in the Cypress farmout acreage was put into production a year ago (January 2021). The well outperformed expectations and reached Payout in 5 months. The well continues to produce without decline. Additional leasing took place last quarter expanding the farmout acreage position held with our partner Cypress (as announced on 8 November 2021) in preparation for the second well to be drilled. Operations for the second well are planned this month. Nostra Terra will own 32.5% Working Interest (“WI”).
Nostra Terra’s operations in the Permian Basin are currently concentrated in the Eastern Shelf, with shallow, conventional wells. The Company owns 53-100% WI over 900 gross acres. The initial acquisitions that took place in 2017 and 2018 allowed Nostra Terra to expand into the area at a low cost while having multiple future potential drilling locations that were Held By Production (“HBP”), thus preserving the right for the Company to drill wells in the future. In 2018 we drilled two new wells, the “Twin Well” and G6, where Nostra Terra holds a 53% WI. Both wells were successful, where the Twin Well reached payout in less than 1 year. These wells, included in our Company-wide production, continue to be strong contributors of our cashflow.
Progress has been made towards drilling new development wells in the same area. The Company now intends to drill 2-3 wells in the Permian Basin during 2022. Nostra Terra plans to own 90% or more WI in those wells.
The Company continues to progress an opportunity in Tunisia, as previously announced on 8 November 2021. If successful, this would provide significant upside potential through exploring a large, gas-prone acreage position in a very prospective region at a time when the gas market is very strong.
Matt Lofgran, Nostra Terra’s Chief Executive Officer, said:
“Nostra Terra finished the year in a strong position. The Company is cashflow positive to the corporate level and have multiple wells planned to drill throughout the year, all funded without need for dilution. We anticipate these wells having a strong contribution to cashflow after allowing for further investment for growth in other areas.
In addition to this we continue to work on additional opportunities in other areas of the world that we feel could have a large impact to our growth.”
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
For further information, contact:
Nostra Terra Oil and Gas Company plc
Matt Lofgran, CEO
Email: +1 480 993 8933
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